Massive security breach at Capital One exposes data of 6 million Canadians

By The Canadian Press–

A massive security breach at credit card giant Capital One Financial has compromised the personal data of roughly 106 million people, including six million Canadians, and left approximately 1 million social insurance numbers exposed.

The breach, announced by Capital One Financial late Monday, involves an alleged hacker and is among the largest security breaches in Canadian history.

The Office of the Privacy Commissioner said Capital One has been in contact about the incident.

“Given the number of people impacted and the nature of the incident, it certainly raises significant privacy concerns,” said spokeswoman Anne-Marie Cenaiko in an emailed statement. “Our office is engaging with Capital One and we remain in close contact.”

In Canada, where Capital One provides Mastercard credit cards for Costco Wholesale’s Canadian retail network and the Hudson’s Bay Company, Capital One said approximately one million social insurance numbers were compromised.

The incident also compromised the data of roughly 100 million U.S. clients, including about 140,000 Social Security numbers and 80,000 linked bank account numbers.

“The largest category of information was information on consumers and small businesses as of the time they applied for one of our credit card products from 2005 through early 2019,” the credit card issuer said in a statement, noting that routinely collected information includes names, addresses, postal codes, phone numbers, dates of birth and income.

The credit card issuer said affected individuals will be notified through a “variety of channels.” All those impacted will also receive free credit monitoring and identity theft insurance, including Canadians, a Costco Canada spokeswoman confirmed.

HBC did not immediately respond to requests for comment.

A spokesman for Costco Canada directed all questions from The Canadian Press to Capital One.

On Monday, Paige A. Thompson, who uses the online handle “erratic”, was charged with a single count of computer fraud and abuse in U.S. District Court in Seattle. Thompson made an initial appearance in court and was ordered to remain in custody pending a detention hearing Thursday.

Federal agents began tracking Thompson online after being notified by Capital One of a possible breach in July.

On June 18, Thompson sent a message on Twitter to another user saying, “I’ve basically strapped myself with a bomb vest, (expletive) dropping capitol ones dox and admitting it.”

The FBI raided Thompson’s residence Monday and seized digital devices. An initial search turned up files that referenced Capital One and “other entities that may have been targets of attempted or actual network intrusions.”

Thompson was a systems engineer at Amazon Web Services between 2015 and 2016, about three years before the breach took place.

While that service is used by Capital One, there is no evidence that Amazon’s cloud system was involved in the breach.

“AWS was not compromised in any way and functioned as designed,” a company spokesperson said Tuesday. “The perpetrator gained access through a misconfiguration of the web application and not the underlying cloud-based infrastructure. As Capital One explained clearly in its disclosure, this type of vulnerability is not specific to the cloud.”

Capital One Financial Corp. was notified by a third party on July 19 that their data had appeared on the code-hosting site GitHub, which is owned by Microsoft. The McLean, Virginia, company says it immediately notified the FBI.

The FBI said a Twitter user who went by “erratic” sent a user direct messages warning about distributing the bank’s data, including names, birthdates and Social Security numbers. That user reported the message to Capital One.

Capital One said it believes it is unlikely that the information was used for fraud, but the investigation is ongoing.

A man walks across the street from a Capital One location in San Francisco on July 16, 2019. A hacker gained access to personal information from more than 100 million Capital One credit applications, including six million from Canada, the bank said Monday as federal authorities arrested a suspect in the case. THE CANADIAN PRESS/AP, Jeff Chiu

In addition to credit cards application data such as phone numbers, email addresses, dates of birth and self-reported income, the hacker was also able to access credit scores, credit limits and balances, as well as fragments of transaction information from a total of 23 days in 2016, 2017 and 2018.

“While I am grateful that the perpetrator has been caught, I am deeply sorry for what has happened,” said Capital One CEO Richard Fairbank in a news release. “I sincerely apologize for the understandable worry this incident must be causing those affected and I am committed to making it right.”

According to Hudson’s Bay’s website, it is not mandatory to provide a social insurance number on a credit card application, but doing so “helps us distinguish you from others with similar information and allows us to accelerate the credit review process”.

Capital One Financial Corp., the seventh-largest American commercial bank with US$373.6 billion in assets as of June 30, is the latest U.S. company to suffer a major data breach in recent years.

In Canada, Desjardins Group revealed a data breach in June that saw the leak of names, addresses, birthdates, social insurance numbers and other private information from roughly 2.7 million people and 173,000 businesses.

The Quebec-based co-operative said a single employee — who has been fired since the breach was detected in December 2018 — was responsible. A police investigation into the incident is ongoing.

In May, Freedom Mobile confirmed that it had been the victim of a security breach, but said the number of customers potentially exposed to the breach numbered 15,000. Researchers at vpnMentor, who discovered the breach and alerted the company, claimed that up to 1.5 million customers had been potentially affected.

In 2017, a data breach at Equifax, one of the major credit reporting companies, exposed the Social Security numbers and other sensitive information of roughly half of the U.S. population and about 19,000 Canadians.

Canada’s Office of the Privacy Commissioner concluded in April that the company fell short of their privacy obligations to Canadians, including poor security safeguards and holding information too long, but it did not level fines.

Last week, Equifax agreed to pay at least US$700 million to settle lawsuits over the breach in a settlement with federal authorities and states. The agreement includes up to US$425 million in monetary relief to consumers.

The average cost of a data breach in the U.S. last year was just under US$8 million, according to a study by IBM Security and Ponemon Institute.

— With files from the Associated Press

Armina Ligaya, The Canadian Press